Top sources of funding for startups

Top sources of funding for startups

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Q4 is looming large. With the holiday and sale season just around the corner, are you facing the funding dilemma familiar to many startups?

You want to use the busy period to build sales and drive revenue. But to do that you need cash reserves. You need to stock up on inventory. You’ve got to pay your suppliers long before revenue from the holiday sales arrives. There are storage costs and rising shipping prices to consider. And you’ll also have to step up your ad spend and marketing activity to get noticed and drive sales.

For a startup waiting for the holiday season to arrive, those cash reserves might not be as large as you would like. If that’s the case for your business, you might need to look at funding options to help you compete during the sales season.

The cheapest and easiest way to access extra funds is to pull operational efficiency levers to free up cash in your business. If you’ve pulled all those levers and still need additional cash, you might need to explore some of these top funding options to boost your seasonal cash reserves.


A quick funding option is to go into the red on your business bank account with an arranged overdraft. Your bank knows your financial circumstances and your business history, so it should be able to give you a fast answer on how much you can borrow.

If you don’t get the answer you want, you can shop around to see if other banks would be more generous with their overdrafts. Interest rates are usually higher on overdrafts than loans, but they have the advantage of flexibility as you don’t have to use the full amount being offered.


  • Quick answer to short-term cash flow problems
  • Flexible amount — you’ll only pay interest on what you use


  • High interest rates
  • Often low limits that may not scale as fast as your business

Access funding by… talking to your bank (or another bank) about overdraft options. You may be able to apply through your online banking.

Venture capital

The archetypal startup funding source and one we happen to know a bit about. Venture capital sees investors put up the cash you need for working capital and growth, usually in exchange for an equity stake in the company.

Depending on what stage your startup is at and the level of funding involved, this could be in the form of seed funding or a more traditional VC investment.


  • Gives access to a large amount of funds and opens up more investment opportunities
  • Typically debt free and flexible agreements


  • Usually involves giving up a sizeable share of the company
  • Needs a company valuation and demonstrable growth potential

Access funding by… showing potential investors strong sales efficiency, solid unit economics and how you plan to grow in a capital efficient way.

Venture debt

Venture debt is similar to venture capital. In both cases, investors are putting their finances on the line to support a startup with strong growth potential. The main difference is that it doesn’t usually involve handing over a large equity stake. Instead, you’ll normally repay the debt plus a rate of interest agreed in advance.


  • Access high-value funding
  • Avoid diluting equity


  • No repayment flexibility
  • Usually requires a sizeable equity cushion (such as existing venture capital funding)

Access funding by… being able to show investors a clear plan for further rapid growth, like for venture capital funding.


Using platforms like Kickstarter, Indiegogo and Patreon, you might be able to secure funding from customers and fans. This is a great option if you’re bringing a new product to market or you have a clear vision that you want to realise. Successful crowdfunding campaigns usually have an active community behind them, or bring a new, innovative product to a sector with an active community. If that doesn’t sound like your business, it’s hard to get noticed via crowdfunding.


  • Raise funds while moving products
  • Can help to boost your brand awareness


  • Often requires a large social community to help increase campaign awareness
  • Crowdfunding platforms take a cut

Access funding by… creating a campaign on your preferred platform. Look out for different fees and policies on partially funded campaigns.

Business term loan

A business term loan is what comes to mind when you think of a typical bank loan. It's called a term loan because you'll repay over an agreed period of time. Your loan will be subject to interest at an agreed rate.

As with overdrafts, a term loan is something you should be able to get a quick answer on from your bank. Again, you can always look at other banks as well. Unfortunately for startups, businesses with low turnover and no trading history are likely to face higher interest rates and less favourable terms (or be ineligible for a loan).


  • Relatively easy to access
  • Fixed repayment term agreed in advance


  • Inflexible terms and usually a fee for early repayment
  • You could lose equity, assets, or even personal assets depending on the security requirements

Access funding by… applying to your bank or another bank. This may be possible from your online banking.

Revenue-based financing

With revenue-based financing, you can fund your startup on the strength of future earnings. Upcoming subscription fees, projected earnings based on past performance, and outstanding invoices are examples of things that can be used to secure funding.

Revenue-based lenders will give you access to those funds early in exchange for a monthly repayment based on percentage of revenue.


  • Lending terms are based on the funds you know are coming into the business
  • Low risk of missing a repayment since they’re limited to a percentage of monthly revenue


  • Your future profits take a hit
  • Funding restricted to current revenue levels

Access funding by… applying to a revenue-based financing company, such as Wayflyer or Pipe.

Credit cards

Few funding options are more convenient than putting your extra spend on a card. But not all cards are created equal. Things like interest rates, payment terms, and spend limits will dictate how useful a line of credit is to your business.

The type of credit you secure will determine how much the funding costs you in interest, how well it boosts your cash reserves, and whether it alleviates cash flow worries.


  • Consolidates into a single bill with minimum repayments
  • Can improve your credit score for future loans


  • High interest rates on some credit
  • Often inflexible payment terms

Access funding by… applying directly to a bank or credit card company.

Choosing the right funding source for your startup

There’s no shortage of options for boosting your cash reserves ahead of Q4. Unless the lender or investor specifies otherwise, any of the options we’ve outlined can be used to invest in inventory, media buying, or general costs.

Your ability to access individual funding options needs to be guided by:

  • Your current revenue levels
  • Your trading history
  • Your financial forecasts
  • Your growth potential
  • Your brand community

Based on that, you can find the best funding option for your business. 

If you're still struggling to find the right funding option, why not return to those operational levers we mentioned earlier — this time equipped with a Juni card —  to free up more cash in your business? The Juni card gives you some extra financial levers to help you operate more efficiently. 

These levers include cashback on all eligible spend, high spend limits, and IBAN accounts in multiple currencies. These are all great ways to boost your cash flow, and for UK customers, we also offer flexible 0% interest credit lines from £10K up to £2M*, based on eligibility. Get the full details here.

* Credit available for UK companies only, upon eligibility. Terms and conditions apply. Penalties and interest may apply for customers that default on payments. See website for details.

Top sources of funding for startups
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Juni is the financial platform built for ecommerce. We give you a unified view of your finances, with cards, mulitcurrency accounts, and banking, accounting and advertising integrations - all in one place. We can even help boost your cash flow with working capital, cashback and more.

Download our free whitepaper and gain important ecommerce and marketing insights, directly from Juni.

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Juni will not share your information with any third parties except for our verified partner network. Submit your email for even more valuable content, delivered straight to your inbox.

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